US Company Lowers Healthcare Costs by Rewarding Healthy Choices

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The U.S. government is debating health care and how to provide health insurance for more Americans. Company CEOs are alarmed at high insurance rates. At the same time, public health officials are alarmed about the skyrocketing rates of obesity and diabetes. One company is addressing all these issues on its own.

Most Americans know Safeway as a grocery store. But Steve Burd, Safeway's chief executive takes more than grocery sales seriously. He says 70 percent of health care costs are the result of behavior so Burd has come up with a health care plan that rewards healthy choices.

He installed a state of the art gym in the company's California headquarters. He also ordered up a cafeteria that serves nutritious meals.

Additionally, Safeway managers and other non-union employees pay less for health insurance if they regularly have their blood pressure, weight and cholesterol monitored. Non-smokers pay less then smokers. Burd says the plan is fair.

"We've done nothing more than follow the business model of the automobile insurance industry," he said.

That industry has drivers with good driving records paying less for their insurance than drivers with bad driving records.

Burd says his plan allows Safeway employees to choose their lifestyles, good or bad.

"They, though, should live with the consequences of the choices that they make," he explained.

A total of 25,000 Safeway employees have signed up for this plan. Many, including Eric Ward, back the decision.

"You have to have some sort of hook to get someone to consider changing their behavior," said Mr. Ward.

And many have changed their behavior. Jo Chiti started eating better and exercising and lost 18 kilograms.

"It just made me think about what was I doing long-term to myself from a health perspective," he noted. "And prior to that, it had always been, 'how do I look?'"

Since he started the incentives program four years ago, Burd says Safeway's health care costs have stayed the same compared to a 40 percent jump for many other companies.

"Bottom line is, develop a health care plan where behavior really matters, and you can more than finance health care coverage for people who are uninsured," he added.

It is certainly one option in the health care debate in America, where a record 47 million people are uninsured.